I have a 1975 240D that I bought after a car accident as a stop-gap until I was able to purchase an appropriate replacement. The body is pretty well rusted out (apparently they really like their roads salty here in NW Ohio), but the engine runs quite nicely and the transmission shifts well. I have changed glow plugs, oil and transmission fluid, and adjusted valves (3x) and done several brake related things to car to make it safe enough to use as a DD.
Engine: 616916-10-061074 (4 cylinder diesel)
Transmission: 081490 (4 speed manual)
It has ~140k, or ~240k, or ~340k miles on it, unable to tell from the odometer, but was sold to me as a 140k mileage car.
I anticipate selling the vehicle as-is for someone to use as a donor into a similar car with a decent body. A friend of mine who is a marine diesel mechanic recommended the following tests: compression, submit oil for metal analysis, run a temp-gun over engine to look for hotspots.
If you were planning on doing an engine swap, would these tests be enough to prove to you that this engine was in good shape, or would you want something else/additional?
What kind of price would be appropriate for this engine if it proves to be in decent shape?
Thanks, Alex

This was the reply I got from Mr. Gerald Lamont when I did just that.
"I'm sure glad your not a mechanic working for me. I'm afraid you'd prove to be a terrible embarrassment to in your inability to discern between a four cylinder naturally aspirated engine and a five cylinder turbo."

But at that age, if I was doing a swap, I would replace the headgasket and valve stem seals for good measure. Actually, there would be a list of chores I would consider before putting that engine into another car.

edit: did not realize you wanted to sell it. I would be happy with the information provided by those tests if I was buying an engine.